3Q Peter de Ruiter - Partner, tax and legal services leader, PwC Romania

What do you think the fiscal climate in Romania means to investors? Is it one of the aspects which persuade them to do business in the country?

In general terms the fiscal climate is not so bad. It is clearly not perfect (but there is obviously no perfect tax system in the world). Let us try to be positive. In the context of the economic recession many governments throughout the world have had to adjust their tax systems to respond to the challenges of the new economic environment. Investors are less interested in tax rates than in having a business (and a fiscal) environment where changes are announced in advance. that lets them define a medium- and long-term business strategy.

What does the fiscal (in)stability in Romania mean to audit and tax firms?

One could say with a certain cynicism that we benefit from frequent tax changes and the fact that Romanian tax legislation is often the subject of diverse interpretations as it means a higher work volume to keep all our clients informed, prepared and aligned with all the changes. It must include fair, robust and transparent tax collection based on a comprehensive legal framework. The execution of the collection and the tax legislation must furthermore be in the hands of a good government and administration living up to the principles of good governance. And the system needs to be overseen and judged by an independent high-quality court system with thorough knowledge of the tax rules.

How does Romania’s fiscal system compare with other countries in the region?

If you compare the tax rates in Romania with several other countries in Central and Eastern Europe you will see that Romania still has a competitive and attractive fiscal environment, with two exceptions: its VAT rate, which is almost the highest in the region, outside Hungary, and the social contributions which are also at a very high level compared with other EU countries. However, the attractiveness of the fiscal environment is related not just to the tax rates, but also to the ease of payment and complying with tax legislation.